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How Is Your SaaS Managing Its Risk Of Depending On Another SaaS To Continue Scaling Operations?

SaaS Operations and Independent Software Vendor (ISV) expert Dani Shomron speaks about the transition that on-demand, Software-as-a-Service (SaaS) providers will have to confront very soon as their areas of specialization conflict with the way that they've set up their own business models:
"...[I]f you look around, you will notice that most SaaS providers are also SaaS consumers. From CRM to Marketing generation, to financials, to you-name-it, SaaS companies are adopters of SaaS technology. (Of course most SaaS companies are even greater adopters of open source; hey, it’s free!).

"Still, most on-demand providers are running their own data centers, the network, the servers, the storage, and I would dare to say, not excelling in that department. SaaS technologists are product people. Innovative, creative, not harnessed by process or procedure. The typical data center is a product of evolution gone haywire. You start up with a couple of servers, and slowly build up, slapping a switch here, a database there, buying a cheap router, until it becomes quite unmanageable. And they probably do not have the right staff to design and maintain the infrastructure.

"SaaS companies are finding it hard to let go of their infrastructure assets, but more and more are realizing that they simply suck at the job. Especially if they are big enough for it to matter, but too small to do a good job.

"Networking, hosting, storage and server management have become a commodity. And as such, shouldn’t you let someone else do the job?

"Enter the managed service providers. They will take care of every tier that you will allow them access to. From hosting, to networking, servers, storage, database monitoring and management, and many are interested in taking over the application management, if you just let them. It is the next tier and probably most lucrative."
SaaS is very alluring, particularly if you wish to execute on rapid marketing in a recession. You can overhaul key areas of your marketing operation very quickly by adopting a SaaS model. But as someone who has had to put these models into operation several times, I will say that it's not often that I find a marketing organization who has done its due diligence in understanding how the SaaS model truly operates from the SaaS provider's point of view. Data integration. Data Hygiene. Infrastructure Scalability. Data Security. None of these matters disappear under a SaaS model of operation. The risks are only hidden outside the Service Level Agreement (SLA) between the client and the SaaS provider. Make sure you understand the direction your SaaS provider is taking with its infrastucture. It's not only your data they're hosting. They're hosting your operation, and that can be your future, you know!

Read the original blog entry...

More Stories By Arturo F Munoz

Arturo F Munoz is an expert business process designer specializing in demand generation, marketing database and CRM operations workflows that consolidate disparate data sources into meaningful and actionable knowledge for the complex marketing and sales organization.

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